Sonatrach and BHGE forms new company to boost Algeria’s oil and gas market

Wednesday, 22 November 2017 06:33

Algeria aims to boost its exploration capabilities to meet domestic demand. (Image source: Powershift2012/Flickr)Sonatrach and Baker Hughes have announced the creation of a 20,000 sqm manufacturing facility in Arzew Industrial Zone, to strengthen Algeria’s position in upstream oil and gas market to meet local demand

Sonatrach and BHGE have formed a new company in which SONATRACH and BHGE have 51 per cent and 49 per cent ownership respectively.

The project draws on the experience of BHGE in oilfield equipment manufacturing and aims to leverage the company’s global and local scale to provide production solutions from the facility.

According to BHGE, the production is scheduled to be started in December 2019.

Through an initial combined investment of US$45mn, the new company is sexpected to provide manufacturing, assembly and maintenance for various types of oilfield equipment including wellheads, xmas trees, BOPs and valves. The aim is to establish a major base to fulfil Algeria’s increased domestic upstream requirements with the potential for future exports.

The facility is also expected to add training capabilities and offer competency development programmes for more than 200 engineers during the first seven years.

In addition to reducing dependence on imports, the facility is seen to boost economic competitiveness and strengthen the local supply chain by creating job opportunities in Oran’s Arzew area and the development of qualified industrial SMEs.

Abdelmoumen Ould Kaddour, CEO of Sonatrach, said, “The creation of this company is a breakthrough in Sonatrach's integration chain, with a view to better controlling costs and deadlines to ensure the transfer of know-how and technologies through the diversification of its portfolio of goods and services.”

“It will contribute to strengthening the national industrial fabric and the creation of a network of national subcontractors, certified to international norms and standards. It will also build on the relationship between Sonatrach and BHGE, and boost it to a partnership of excellence,” he explained.

Rami Qasem, president and CEO of BHGE Middle East, North Africa, Turkey and India, added, “Through the delivery of high end oilfield products and services, BHGE reaffirms its focus on driving further productivity for our customers across the entire oil and gas value chain.”

“The new company will not only revitalise Algeria’s local supply chain, but also position the country as a key manufacturer in industrial equipment,” Qasem noted.